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What Licenses Does A Car Detailing Business Need?

What Licenses Does A Car Detailing Business Need?

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What Licenses Does A Car Detailing Business Need?

Starting a successful car detailing business takes more than knowing how to make a car look new again. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

The question, “what business license do I need to start my car detailing business” is a common one, but in reality, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a car detailing business.

Related: Guide to starting a car detailing business

While we have researched what licenses and permits your business may need, please be aware that there is no way for us to have uncovered every state and local requirement.

To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or LegalZoom.

What Licenses Do You Need to Start a Car Detailing Business?

Wastewater Regulations

Very few states directly regulate car detailing businesses, however, since your business will be dealing with wastewater, your city may require environmental clearances before you begin operation.

For instance, California requires all businesses that offer car washing and polishing to register with the California Department of Industrial Relations.

In addition to wastewater regulations, there are several general requirements for starting a business.  While business licensing requirements vary by location, here are a few of the common licenses and permits that a car detailing business may need:

Entity Formation

When starting a business, the legal entity needs to be selected. A legal entity refers to how a business is organized to operate. There are four main types of entities; sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Each type of entity has its own pros and cons, such as liability protection, costs, and administrative requirements.

Related: What is the difference between a sole proprietorship, partnership, Corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, assumed name, or trade name registration).

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or one that forms as a partnership, Corporation, and in many cases, an LLC will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

Learn: How to get an EIN 

Sales Tax Permit or Business Number

In order to sell products and/or offer certain services, a state sales tax permit (also referred to as a business tax registration or business tax ID number) may be needed. This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Most states don’t require businesses to collect sales tax on services, but this is important to check before starting the business.

Learn: How to get a sales tax permit in each state

Certificate of Occupancy

In most communities, a car detailing business will likely need to secure a Certificate of Occupancy (CO) before operating in a physical location, like a garage.  This certificate is typically obtained from the city and/or the county and allows a business to occupy and operate from a building. Before the certificate is issued, the building will need to comply with zoning regulations, building codes, and any other local requirements.

If the car detailing business will be operated as a home-based business, a home occupation permit may be required.

Before purchasing or leasing a location for your car detailing business, be sure to check with the local zoning department first to ensure the business can legally operate out of the chosen location.

Also see: Top auto detailing software review

The process of identifying all of the licenses and permits necessary to start a car detailing business may feel confusing and overwhelming. It is critical to do this right the first time, otherwise, your business may be temporarily shut down until all licenses are obtained.

These are some of the most common business licenses, but there may be specific licensing that isn't listed. Before starting your business, be sure to check with the City Clerk, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like Incfile or Legalzoom can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.

What Licenses Does A Car Detailing Business Need?

What Licenses Does A Car Detailing Business Need?

10 Responses

  1. I am starting a mobile car detailing business and i need to know what permits and licenses that are required in the state of Texas.

    1. Hi Alyssa

      Here is a guide to common licenses in Texas – https://startup101.com/texas-business-license-permit/.

      In particular, you will want to see what your local licensing requirements are by contacting the city hall, economic development office, or Chamber of Commerce. Every city is different and since you are mobile, you will want to check if you need a business license before performing the work. Also, since there will be water discharge, you will want to check with the Texas Commission on Environmental Quality (look under Cleaning) – https://www.tceq.texas.gov/permitting/business_types/type_c.html.

      Provided you aren’t selling any cleaning products, a sales tax permit won’t be necessary – https://startup101.com/how-to-register-for-a-sales-tax-permit-in-texas.

      Hope this helps! Let me know if you have any other questions.

      Thanks!
      Greg

  2. What if my business if to connect car owners with mobile detailers/car washes while i negotiate price. do i need a permit?

    1. The regulations for this type of business would likely be minimal, but dependent on your location. I would recommend first checking on state and local business licensing and whether you need a sales tax permit. Here is an overview of the steps in each state – https://startup101.com/state-guides/.

      Let me know if you have any other questions!
      Greg

  3. In Massachusetts are there regulations for home based car details ? (My neighbors are 20ft from my garage )Where should waste water be disposed properly? Am i able to just dump into side yard that i share with my neighbors . Are they any ways my neighbors are able to shut me down even if I have approval from town ?

    1. Hi Karen – A few things that you are going to want to check on.

      1) Are there covenants or zoning restrictions in your neighborhood that would keep you from operating a business? Covenants would have been filed with the county, likely with the Registry of Deeds and zoning is likely with the County Assessor.

      2) It doesn’t look like dumping the water is legal in Massachusetts. Here is a state guide for wastewater regulations from the state that should be helpful – https://www.mass.gov/files/wastewater_regulations_and_best_practices.pdf

      Let me know if you have any other questions!
      Greg

  4. I’m starting a mobile detailing company in Oklahoma and am wondering if there are any license’s or things i need to do before starting work. also do I need to charge a sales tax for every detail I do?

    1. Hi Andrew! Congrats on getting started with your business. If you haven’t already, you may want to check out our steps to starting a business in Oklahoma for some general state specific requirements – https://startup101.com/oklahoma/.

      In addition to the general startup requirements, you will want to check into the Oklahoma Pollutant Discharge Elimination System (OPDES) Act to see if you need permitting for waste water- https://www.deq.ok.gov/wp-content/uploads/water-division/OKG75-Vehicle-Wash-Facility-General-Permit-and-Fact-Sheet.pdf. In addition to state permitting, many cities also have restrictions or registration requirements. For instance, this link will take you to Tulsa (Section 502). https://library.municode.com/ok/tulsa/codes/code_of_ordinances?nodeId=CD_ORD_TIT11-ASTMAHAMIPR_CH5PO_S502DIRE

      Hope this helps some. If you have any other questions, please let me know!
      Greg

  5. Hi my name is Serenity and i am going to be starting a mobile car detailing business and i was wondering what all i would need to in order to be completely legal to get up and running. I would be running this business out of Hazen North Dakota. thank you!

    1. Hi Serenity – Congratulations on starting your business! I don’t know if you have looked at this yet or not, but here is a guide to starting a business in North Dakota – https://startup101.com/north-dakota/. The details are a little sparse for the City of Hazen, but this document should help – https://www.hazennd.org/vertical/sites/%7B3541AE07-8F10-4F5C-8015-24696DA58E22%7D/uploads/business.pdf.

      Let me know if I can answer any other questions!
      Greg

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